Finding affordable housing is often a struggle, even when the economy is good. PadSplit aims to make it easier with a marketplace that shows available shared housing opportunities for low-income workers.
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To carry on with its mission-driven work, the Atlanta-based company closed on a Series A funding totaling $10 million on Wednesday. PadSplit brought in $5.7 million back in April and is pairing it with $4.3 million in new funds, founder and CEO Atticus LeBlanc told Crunchbase News. This brings the company’s total fundraise to $14.6 million since being founded in 2017.
“PadSplit provides a truly unique solution to a complicated national problem that’s becoming more dire each day,” said Arjan Schütte, founder and managing partner of Core Innovation Capital, in a written statement. “We’re proud to support Atticus and the PadSplit team as they expand into new markets and introduce critical housing supply at a time when so many require affordable housing.”
As a result of the economy and the global pandemic, as well as the federal eviction moratorium ending last month, 12 million low-income households are under threat of eviction, The Washington Post reported in July.
Hoping to reverse this course, PadSplit’s platform aligns incentives among property owners, cities and the individuals who need affordable housing.
Here’s how the model works: PadSplit uses existing housing stock to convert single-family homes or apartments into shared housing for workers and retirees earning less than $35,000 a year. The company operates more than 1,000 units, primarily in Atlanta, but also in Houston, as well as Virginia, Alabama and Maryland.
Room rates average $109 per week and include furniture, utilities, Wi-Fi, laundry, telemedicine visits and credit reporting for all on-time payments. Members are able to save $516 per month on average, enabling them to purchase their own vehicles, build credit histories and ultimately move into their own apartments or homes, LeBlanc said.
Meanwhile, the company will use the funds to scale in new markets, including ramping up in Houston, and give more cities the ability to tackle their affordable housing crisis without requiring additional taxpayer dollars.
“There is lots to be built out on the product, but we are thrilled with the progress we have made in the last 12 to 18 months, where now essentially any owner can onboard a property,” he added. “We have proven what we need to do and are focusing on expansion, particularly now with the looming eviction crisis.”
Photo of a PadSplit member and bedroom courtesy of PadSplit
Illustration: Li-Anne Dias